Chile: Solar price hits global record

A record low of $29.10 per megawatt hour has been achieved by Chile for the first time in an energy auction last week. With solar technology becoming ever more affordable, places with abundant sunshine will likely see contract prices continue to fall, leading to even more low-price records.

Just last May this year, Dubai is the one who holds the record or the lowest solar energy price, but the new low solar price of Chile beats out the record. Advances in solar panel technology have slashed manufacturing costs, translating into lower prices throughout the industry.

â€œSolar energy technology has evolved and proved it is competitive. Prices for electricity generation have changed drastically in the last years. Solar energy in Chile is now the cheapest in the market,â€ Solarpack General Director Inigo Malo de Molina said.

Aside from the plummeting cost of equipment, renewable energy developers were inspired to make historically low bids because of the broad scope of potential of the Chilean solar farm in question. The government there plans to install new infrastructure to connect the solar power farm to the nationwide grid, which is an early indication that renewable sources could eventually edge out fossil fuels.

Contracts were now awarded to vendors promising to provide 12,430 gigawatt hours each year, which accounts for roughly one-third the countryâ€™s grid customers. On average, prices dropped 40 percent compared to a similar energy auction last year, suggesting that the energy industry in Chile is more competitive than ever.